Central Banks started to develop national digital currencies (CBDC)
The global pandemic has triggered a rise in digital payments. Many nations, including China, Japan, the European Union, Sweden, the United States, and more, have started to work on creating their state-issued digital currencies. While the principle of their work is somehow similar to cryptocurrencies, central bank digital currencies (CBDC) will feature centralized networks where the state has more control over the users. Among 46 countries working or researching the CBDCs, China is clearly leading the race. In May The People’s Bank of China said that it completed the back-end architecture development of the digital yuan. What’s more — there are also draft laws ready to speed up the CBDC’s implementation.
Development of CBDC can be the way to the new economy and potentially can facilitate the adoption of cryptocurrencies too.
Square, Inc. Invested $50 Million in Bitcoin
Following MicroStrategy’s investment in Bitcoin, another firm, Square, Inc. announced that it has purchased approximately 4,709 bitcoins for $50 million. This purchase reflects Square’s belief that cryptocurrency is an instrument of economic empowerment and allows the world to participate in a global monetary system.
PayPal enabled cryptocurrency trading
One more big market participant took a closer look at cryptocurrencies. PayPal launched a new service allowing customers to buy, hold, and sell cryptocurrency directly from their PayPal account. What’s more the company plans to increase cryptocurrency utility “by making it available as a funding source for purchases at its 26 million merchants worldwide”.
Decentralized Finance (DeFi) has been stealing the headlines in 2020. This attention has been fueled by the development of a number of decentralized applications which unveiled more earning opportunities in crypto. Lending, yield farming, liquidity mining, automated market making (AMM), and more brought into the spotlight such projects like Uniswap, Aave, MakerDao, Curve, Balancer, Yearn.finance, and the like.
At the beginning of the year, the total value locked in the DeFi sector was $675M. In December it reached $16,67B, which is impressive growth.